At Xendoo, our passion is small businesses and at times like this, it’s critical we support each other and share our expertise on how to overcome challenging circumstances.
Amidst the Coronavirus COVID-19 outbreak, health and government officials are working to maintain the safety of us all. As a small business owner, it is not only important to maintain you and your family members’ health, but also the health of your business.
Our CEO & Founder, Lillian Roberts, has been through economic disruptions before and is sharing her insights on what worked for her in previous businesses to come out on the other side.
1. Revisit all loans as interest rates have come down
There may be cash flow opportunities by lowering your payments. If you find yourself in need of a small business loan, you’ll need to have your financial information up to date so you can start the process of applying. If you’re in a severely impacted area, be aware that the SBA is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering injury as a result of the coronavirus. Read more here.
2. Check your staffing against current needs vs forecasted needs
The uncomfortable reality of an economic downturn is assessing staffing levels against needs.
Meet with your core team and determine if there are opportunities to consolidate efforts and increase your operational efficiency. If changes need to be made, see if there’s an opportunity to keep your full team and reduce working hours. This way, everyone shares the burden and comes out on the other side together.
3. Look at fixed and variable expenses
During an economic downturn, going through the exercise of outlining all expenses will provide you with better insight into your costs which will inform the decisions you will need to make. Fixed expenses such as rent, equipment leases, payments on loans, and subscriptions cannot be eliminated but there may be opportunities to renegotiate. Also, if you’re sitting on cash reserves, this is an opportunity to get attractive pricing on overdue investments.
4. Trim 10%
Once you’ve outlined all fixed and variable expenses for your business, review to trim 10%. Assess which fixed expenses can be negotiated and which variable expenses can be eliminated temporarily. If there’s an opportunity to trim more than 10%, take advantage of those cost savings.
What we’re experiencing right now is an unforeseen economic downturn, much like the unfortunate times we have seen previously. It’s too early to tell how long and how severe this may be and therefore, difficult to truly understand the impact. Though it’s unclear whether this will last three weeks or three months, we do know that history has proven that we will survive it and we will thrive again.
Xendoo’s passion is in supporting small business owners and though our usual course of business is wider than tax returns or small business loans, we’re here to help small business owners in any way we can.
If we can offer assistance to you and your business, please click here to schedule a call with us.